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FTSE100 puts in strong finish; Gov't to sell more Lloyds shares

Last updated: 04:13 26 Mar 2014 AEDT, First published: 05:13 26 Mar 2014 AEDT

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The UK benchmark put in a strong finish Tuesday, ending 84.5 points up at 6,604.

Investors were buoyed by a raft of upbeat corporate statements and news that there had been a drop in inflation last month.

It moved to a new four-year low of 1.7% - the second consecutive month that the Consumer Prices Index rate has been below the Bank of England's 2% target.

Commentors reckon it eases pressure on the Old Lady of Threadneedle Street to move interest rates higher

At the end of the day, however, it a was part tax-payer owned bank Lloyds (LON:LLOY), which was capturing the headlines.

UK Financial Investments (UKFI), which manages the govt's stakes in Lloyds and RBS is to sell a further 7.%% stake worth around £4.2bn through a placing - taking the national stake down to 25%.

The price is expected to be above the price the government paid when it bailed it out six years ago. Shares in Lloyds ended the day 0.78% up.

B&Q owner Kingfisher (LON:KGF) was the biggest riser as it noted signs of consumer confidence returning in its core markets across Europe, while also promising a £200mln additional payout to shareholders this year.

The company, which also owns Castorama and Brico Depot in France, and Screwfix in the UK, saw profits rise by 10% in the year to end January to £759mln, while underlying profits rose by 4.1% to £744mln.

Carnival  (LON:CCL) was the biggst loser when ity slumped when the embattled cruise operator revealed it swung to a loss in its latest quarter

Meanwhile, getting the silver medal on the podium was budget carrier EasyJet (LON:EZJ), up 2.76%, as it revealed its first-half loss would be smaller than expected thanks to the mild European winter.

But the biggest story of the day belonged to new float Royal Mail (LON:RMG), which announced plans to cull around 1,600 jobs.

The news prompted warnings of strikes from the Unite trade union, which represents the majority of those staff affected. The latest devleopment also follows a stamp price hike announced last month.

Meanwhile, the junior market was also showing upbeat sentiment - FTSE  AIM All-share gained 5.71 points, while FTSE AIM 100 added over 45 to go to 3820.

Turning to the junior space, shares in New Zealand focused Mosman Oil & Gas (LON:MSMN)  were lifted 3.17% as it said it had acquired the long lead items ahead of the drilling and testing on its Petroleum Creek Project as it gave details of the location of the first two wells.

The initial well, called Crestal – 1, will test the crest of the large subsurface structure west of the Kotuku Fault. 

It will be located close to Widespread-1A well, which was abandoned at 90 metres without testing, though it encountered oil shows.

This latest well will be drilled to depth of around 400 metres.

Mosman’s second well, Crossroads-1, is to be sited north-west of Crestal and will go as deep at 700 metres, penetrating several potential reservoir zones, including the Cobden limeston

Elsewhere, Caza Oil & Gas (LON:CAZA, CVE:CAZ) was boosted after it unveiled a 67% increase in annual revenues following the roll-out of new wells in the Bone Springs play, in New Mexico.

Revenues for the 12 months to December 31 totalled US$8.31mln, versus US$4.97mln in the year before. This saw group losses narrow to US$8.5mln in 2013, from US$12.24mln in 2012.

The impact of the new Bone Springs wells was particularly evident in the figures for the fourth quarter, with revenues up 114% in the final three months of the year at US$3.38mln.

Tungsten Corp (LON:TUNG), an electronic invoice specialist, also got a boost Tuesday - 5.06%.

It revealed it expects to receive regulatory approval for a formal change of control of FIBI Bank(UK) by the end of May.

The request, which would conclude the acquisition of FIBI Bank, was submitted yesterday to the UK's Prudential Regulation Authority and the FinancialConduct Authority.

Niche lender S&U (LON:SUS) was also wanted and shares rose 5.63% as investors hailed a good set of full year numbers. It prompted broker Canaccord to upgraded its rating on the stock to 'buy' from 'hold'.

The company provides finance to customers through its home credit division - Loansathome4U, and has an established motor finance arm called Advantage, which was responsible for driving the group's profits up for the year by 21%.

Canaccord analyst Robin Savage honed in on the "quality of the earnings", announced today, noting the group's record collections, and profitability, which was driven by growth rather than loan growth.

Elsewhere, Bushveld Minerals (LON:BMN) eased as it revealed news of an agreement to acquire the majority of a tin tailings dump that could be the catalyst for early production from its Mokopane project in South Africa.

It made the announcement as it revealed the details of flexible, equity-funded facility that will give it access to up to £2.85mln.

Bushveld will pay £559,470 for 87% of the Zaaiplaats tailings, estimated to contain between 2,600 and 4,500 tonnes of tin.

Bushveld also said it had agreed a funding package with Darwin Strategic, which has subscribed for 50mln shares at 5.7p each.

Darwin will sell the shares when told by Bushveld and buy back tranches of redeemable subscription notes held by the AIM-listed mine developer.

Mojapelo said the notes provide Bushveld “ultimate control and flexibility” of its financial needs.

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